AI Hallucination Research › Regulators › Major advanced economies › GB › FCA › CONSUMER-DUTY-PS22-9 › White paper › Detail › Finding
AI Labs · published 2026-05-26 · methodology v2.1

Claude Opus 4.7 with web search

RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q018-Opus47
What the RLB Specialist Panel found
  • Question (paraphrased to protect IP): Does the Consumer Duty apply to reinsurance companies, group insurance policy distribution, or large-risk commercial contracts?
  • AI's response: > "Group insurance: the Duty can apply via the distribution chain when group policy beneficiaries are retail customers... firms manufacturing/distributing policies where individual retail beneficiaries are protected fall within scope where they materially influence retail outcomes."
  • Regulator's text: Consumer Duty does not apply to reinsurance, contracts of large risk sold to commercial customers where risk is located outside the UK, nor to activities connected to the distribution of group insurance policies or the extension of these policies to new members.
  • Why the AI went wrong: The FCA's rules contain an explicit exclusion for the distribution of group insurance policies and the extension of those policies to new members. The model constructed an opposite answer: that the Duty can apply to group insurance distribution where retail beneficiaries are involved. This is a direct contradiction of the published exclusion, not a nuance or edge case. The model appears to have applied a general principle about distribution chains and retail customer exposure without recognising or retrieving the specific exclusion the regulator has written into the rules.
  • Cited source(s):
  • https://handbook.fca.org.uk/handbook/PRIN/2A/1.html — Pretextual
  • https://www.fca.org.uk/publication/finalised-guidance/fg22-5.pdf — Pretextual
  • Regulator portal (if any cited link is dud): https://www.fca.org.uk
Impact for this audience

This is the most consequential factual error in the Opus 4.7 evaluation: the model directly contradicted a specific regulatory exclusion. The FCA's rules explicitly exclude group insurance distribution from Consumer Duty scope; the model asserted the opposite. This implicates the model's handling of explicit scope exclusions in regulatory text — a pattern where general principles about distribution chains and retail customer protection override the specific carved-out exclusion. Eval probes that pair a general principle with a specific exclusion would surface this failure mode across regulations.

References — raw findings (per AI model)
This finding also affects
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Cite this finding

Each finding has a stable Citation ID (RLB-F-… for aggregated case-study findings, RLB-H-… for raw per-model hallucinations) — like a DOI, the ID always resolves to the canonical finding even if URLs change.

Plain text 
RegLeg Specialist Panel (2026). "Claude Opus 4.7 with web search — AI Labs." Citation ID: RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q018-Opus47. RegLegBrief AI Hallucination Research, published 2026-05-26. https://reglegbrief.com/regulators/j3/gb/fca/consumer-duty-ps22-9/whitepaper/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018--opus-47-websearch/
APA 7th edition 
RegLeg Specialist Panel. (2026). Claude Opus 4.7 with web search [Hallucination finding RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q018-Opus47]. RegLegBrief AI Hallucination Research. https://reglegbrief.com/regulators/j3/gb/fca/consumer-duty-ps22-9/whitepaper/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018--opus-47-websearch/
Bluebook / OSCOLA (US + UK legal) 
RegLeg Specialist Panel, Claude Opus 4.7 with web search [RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q018-Opus47], RegLegBrief AI Hallucination Research (May 26, 2026), https://reglegbrief.com/regulators/j3/gb/fca/consumer-duty-ps22-9/whitepaper/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018--opus-47-websearch/.
BibTeX 
@misc{reglegbrief_RLB_H_GB_FCA_CONSUMER_DUTY_PS22_9_Q018_Opus47,
  author    = {RegLeg Specialist Panel},
  title     = {Claude Opus 4.7 with web search},
  year      = {2026},
  publisher = {RegLegBrief AI Hallucination Research},
  note      = {Hallucination finding Citation ID: RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q018-Opus47},
  url       = {https://reglegbrief.com/regulators/j3/gb/fca/consumer-duty-ps22-9/whitepaper/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018--opus-47-websearch/}
}
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